A bipartisan group of lawmakers has introduced legislation that would throw out Trump administration tariffs on imported solar products.
"Under this legislation, duties and tariffs would default back to previous rates and would allow companies that imported any affected solar products under this new tariff to receive retroactive reimbursement," according to a press release.
The bill (HB 5571) was filed Thursday by Rep. Jacky Rosen (D-Nevada) as a way to protect renewable energy jobs in her home state. According to Rosen, President Trump's 30 percent tariff on foreign-made solar modules has threatened the stability of Nevada's fast-growing solar industry.
"An attack on solar energy is an attack on the countless hardworking Nevadans who benefit from this growing industry," Rosen said in a statement. "My new bill will reverse this damaging decision.”
The Protecting Solar Jobs Act was introduced in the House Committee on Ways and Means with backing from Rep. Jared Huffman (D-Calif.), Rep. Mark Sanford (R-SC), Rep. Ralph Norman (R-SC) and Rep. Steve Knight (R-Calif.).
Sanford, an outspoken critic of the president's protectionist trade agenda, noted that strong solar industry growth has led to more than 7,000 jobs in South Carolina's solar sector — jobs now at risk because of the tariffs.
"A tariff is a tax, and I don't know what good can possibly come as a consequence of stifling the growth of solar power," Sanford said on Thursday. "Solar power is one of the cheapest and fastest-growing renewable energy sources, and if we are really focused on becoming energy-independent, now is no time to slow its growth."
According to the Solar Energy Industries Association (SEIA), the 30 percent tariff on imported solar cells and panels could cause the loss of up to 23,000 American jobs in 2018, as well as delay or erase billions of dollars' worth of solar investments. According to GTM Research, the tariff will cause a roughly 11 percent net reduction in U.S. solar installations from 2018 to 2022 — which translates to a 7.6-gigawatt reduction in installed solar PV capacity over the next five years.
Abigail Ross Hopper, SEIA president and CEO, threw her support behind the new bill.
“This bipartisan legislation is an important step in countering the harmful impact of tariffs on the solar industry,” said Ross Hopper, in a statement. “Across the country, the rise of solar has generated thousands of new jobs and provided communities with clean, sustainable power. It is clear that solar is the energy of choice for Americans and we must do what we can to allow this economic engine to continue to advance here in the U.S.”
Speaking last week at the Bloomberg New Energy Finance Summit, Ross Hopper acknowledged that the solar tariffs were "more a punch to the gut than a complete decapitation." Still, around 20 solar companies have come forward so far with specific examples of how the tariffs have led to layoffs, stalled investments or project cancellations.
Over the course of this year, the industry will see “what could have been versus what will be," she said.
According to Morten Lund, partner in the energy group at law firm Stoel Rives, the newly introduced House bill could renew interest in making solar investments in Texas, Utah and other price-marginal markets, if passed. The bill could also lead to the cancellation of proposed new module assembly facilities in the U.S.
That list includes the $50 million factory Chinese manufacturer JinkoSolar plans to build in Florida, and U.S. firm SunPower's plans to acquire solar manufacturer SolarWorld Americas — one of the petitioners in the Section 201 solar trade case.
Shane Skelton, former energy policy adviser to Paul Ryan and partner at consulting firm S2C Pacific, doesn't think the bill is going anywhere.
“I think it has absolutely zero legs," he said. According to Skelton, free market Republicans are currently laser focused on making changes to NAFTA, and have very little political appetite to push back against the president on solar tariffs.
“I don’t see them spending any political capital or wasting 30 minutes of committee time on this," he said.
As HB 5571 waits to see further action, a lawsuit against the tariffs brought by Canadian solar companies continues to move forward. At the same time, at least five U.S. trading partners have lodged complaints at the World Trade Organization.
This story was updated to include additional comments.
By all measures, Africa is currently losing the battle to end energy poverty by 2030.
U.N. Sustainable Development Goals commit the global community to delivering accesstoaffordable, reliable, sustainable and modern energy for all.One barrier to success is the ongoing political debate about how best to provide power to the more than 600 million people in Africa without access to electricity. Vested interests, inertia, aversion to change — all traits of the energy sector — do not lend themselves to speed, nor to innovation.
The debate has huge financial, economic and social implications. To solve it, empirical questions on technical feasibility and cost must be solved. At the same time, tough judgments about what quality of power people should receive, how much they should pay for it, and the role of the private sector vs. the public sector must also be addressed.
Three main ways exist for providing electricity access: 1) extension of the existing electricity infrastructure (i.e., “main grid extension”); 2) minigrids; and 3) standalone solar home systems (i.e., residential solar). All three have a role to play.
Minigrids are self-sufficient electricity grids with their own power generation, storage and transmission capacities. They can serve households and businesses isolated from or integrated with the main grid.
The potential for minigrids to play a role in universal electrification in Africa has been well recognized. Beyond their ability to integrate with the main grid, they are also the least-cost option for many people in rural Africa. The International Energy Agency in 2014 estimated that minigrids could serve 140 million people by 2030. In an updated projection last year, it put that number at 290 million, or more than double the original estimate.
However, actual minigrid deployment is still extremely limited. As such, justifiable skepticism exists on whether this potential can be fulfilled.
In an effort to put that skepticism to rest, CrossBoundary developed a new analysis to calculate theminimum number of people in Africa who can be most cheaply connected by minigrids today, compared to the two other options.
Why is this important? Because when governments, donors and investors do reach consensus, they mobilize billions of dollars to support millions of connections. The pay-as-you-go solar home system sector in Africa — comprising systems serving single households — raised over $750 million from 2012 to 2017. This is dwarfed by the investments that single countries are making on expanding their existing grid infrastructure. For instance, the Kenyan government is investing $1.4 billion, supported by $675 million from the World Bank, African Development Bank and other development funders to build generation capacity, transmission lines and distribution networks.
In comparison to those sectors, the top five minigrid developers in Africa have raised less than $100 million over the last five years.
To help establish this "minimum role," CrossBoundary has undertaken a least-cost analysis (based on “like-for-like” connections — average 100 watts per household) in order to estimate the number of people for whom minigrids are the cheapest way to connect today. We took the most conservative view possible. No projections on population growth, no future cost reductions on minigrids, and no assumptions beyond minimum quality of power required. We used the costs now, for the people who live off-grid now.
What is the minimum number of people in Africa for whom minigrids are the most cost-effective option?
As the chart below shows, of the three paths, no single means of electrification is always the cheapest. Main grid extension is generally the least-cost option for people who already live close to the grid (such as urban and peri-urban populations). Minigrids are usually least-cost for people who live so far from the main grid that extension costs are higher than installing local generation and storage capacity, but in a location densely populated enough to support the fixed costs of building the minigrid infrastructure. Solar home systems are the least cost for everyone else -– those living in sparsely populated areas, where running poles and wires from even a local minigrid becomes expensive.
Range of Connections Benchmarked Across Africa for Main Grid Extensions, Minigrids and Standalone Systems
CrossBoundary started by combining the data on existing and planned high-voltage transmission lines from the World Bank with data on the population density of Africa by square kilometer from WorldPop. This allowed us to map out where each square kilometer of population is relative to the high-voltage grid. These data sets paint a clear picture of the challenges for electrifying rural Africa. First, Africa in parts is sparsely populated: Over 350 million people live in square kilometers that contain fewer than 100 people, equivalent to a family of five living on 10 football fields of land. Second, people often live remote from infrastructure: 135 million people live more than 100 kilometers from existing and planned high-voltage lines.
Next, we built up cost estimates to arrive at the tipping points between main grid extension, minigrids and solar home systems, allowing us to segment every square kilometer into its least-cost option. We did this by considering the costs of minigrids against the cost of main grid extension or solar home systems, assuming similar average electricity consumption. Our tipping points ultimately identify an average break-even distance from high-voltage lines where localized solutions become cheaper than main grid extension, and a break-even population density where minigrids are cheaper than solar home systems.
To establish the costs for minigrids today we have benchmarked costs for existing projects from 15 minigrid developers across East, South, and West Africa. To make sure we hit the rock-bottom of our estimate for the role of minigrids, we also made two generous assumptions for the existing grid and home solar:
On these assumptions, minigrids are cheaper than grid extensions at an average tipping point of 25 kilometers from the high-voltage grids, and cheaper than home solar at an average tipping point of 400 people per square kilometer.
Running this analysis allows us to identify the least-cost option for electrifying the roughly 600 million people the World Bank estimates live in unelectrified areas. For 2018, we estimate that 210 million people are most cheaply served by grid extension (green), 100 million by minigrids (blue), and the remaining 310 million people by solar home systems (gray).
African Off-Grid and On-Grid Populations by Source
So, returning to the original question: Should minigrids have a role in delivering universal access in Africa?
Yes, because they are the cheapest way to deliver power for at least 100 million people.
Our minimum analysis approach compares well with more complex and optimistic models. Other published estimates have more complex methodology and also projections on minigrid cost reductions and population growth. We are right at the lower end of estimates made by UN-DESA and IEA, both using the KTH Royal Institute of Technology model. The striking increase in IEA’s estimate from 140 million in 2014 to 290 million in 2017 is driven by falling costs of solar, better information on population densities, and rollout plans of the existing grid. Our analysis establishes a minimum number that the most hardened skeptic can accept. These models establish more realistic estimates for those who already see the potential of mini-grids.
Number of People Minigrids Can Serve as a Least-Cost Option
There are still many questions that need to be answered on the best way to achieve affordable, reliable, sustainable electricity access in Africa. For example, how much subsidy will be required to achieve this goal? What mix of public- and private-sector interventions are required? Should Africa build a grid that resembles the legacy grid of developed countries or start building toward a more distributed grid of the future?
This analysis shows there is an immediate role for minigrids in reaching universal electricity access in Africa. Our analysis shows that the minimum number of people most cheaply electrified by minigrids today is at least 100 million. We estimate the investment required to connect those 100 million people by minigrids is $11 billion.
That number of people, and that amount of capital, is enough for donors and governments to allocate far greater levels of funding to minigrids today if we truly want to make sustainable energy access a reality.
Matthew Tilleard, Gabriel Davies and Lucy Shaw are with CrossBoundary Group.
Tesla now charges more for its Powerwall than it did back when the product launched in October 2016.
The company's website now lists the starting price for the 7-kilowatt/13.5-kilowatt-hour storage system as $5,900 — a $400 increase from the original list price of $5,500. The actual price to a customer will be higher still, because it includes supporting hardware, installation and other fees.
The $5,900 rate applies to new orders; orders placed before February 22 will have the previous pricing, a Tesla spokesperson clarified by email Thursday.
"Tesla evaluates its global pricing of energy products based on various factors and continues to make improvements that will simplify homeowner experience," the spokesperson noted. "Powerwall continues to provide great value for customers and installers."
Conventional wisdom in the industry has held that energy storage prices will fall as battery manufacturing scales up. Indeed, the Powerwall 2 debuted at a price point 40 percent cheaper than its predecessor, based on energy capacity.
Since the Powerwall 2 launch, Tesla has had a year and a half to increase its manufacturing capabilities. Battery prices have fallen by double-digit percentages annually. Analysts suggest future demand for electric vehicles could create scarcity for battery materials like cobalt, counteracting battery price declines, but that's still a ways off.
The Powerwall price hike, then, cuts against the grain of broader energy storage industry trends.
This is not the first time that Tesla has revised its battery offerings without fanfare.
Greentech Media reported in March 2016 that Tesla had quietly discontinued its longer-duration Powerwall model, which was intended to target customers looking for backup power. The company said at the time that it had decided to focus exclusively on its shorter-duration product for daily cycling. It scrubbed the backup model from its online presence.
Even Tesla's competitors concede that the company catalyzed public awareness of what energy storage can do. It also cemented a reputation for the lowest home battery pricing, leveraging the in-house supply chain built for its electric vehicle business to offer price points that make competing products look like luxury items.
It's not clear which "various factors" drove the decision to charge more.
The actual cost to build a storage product remains a jealously guarded secret. It's possible that Tesla chose to prioritize market share initially with a low price, and bank on increasing margins when its production costs came down. In that scenario, the choice to raise the list price could reflect an adjustment of the relationship between the cost to build a Powerwall and its end price.
Or the company might just need more cash.
Production of the Model 3 sedan has lagged behind targets due to manufacturing bottlenecks. The pressure from the automotive business might be rippling out to other sectors of the company. The solar business already underwent a cost-cutting process, by stopping door-to-door sales and prioritizing more profitable deals.
That said, the company's home battery sales nearly vanish when compared to its automotive revenue.
Whatever the reasons, the change counters the optimistic view that the only direction storage product prices can go is down.